Start-up firm Atlantic Resources secures equity commitment

Published 10:20 am, Tuesday, February 10, 2015

Despite a plunge in oil prices, Permian Basin oil fields are still seen as offering prime opportunities.

Denham Capital, an international energy and resources-focused private equity firm, is the latest to bet on the Permian, offering an equity commitment to the new Atlantic Resources Co. LLC.

Will Abney, Atlantic’s general counsel, said the management team sees a lot of opportunity in different areas of the Permian, including the Midland and Delaware basins.

Richard Jennings will serve as chief executive officer, with Rodney Woodard as president. Other members of the management team, in addition to Abney, are Ross Cox, Douglas Prieto and Bruce Woodard.

Geer Blalock, director at Denham Capital, said, “We view it as a fantastic time to give a talented team like Rick, Rodney and everyone the opportunity to go out and find oil and gas.”

Noting that Denham has been active in the Permian Basin oil and gas fields for awhile — Tall City Exploration is another company in its portfolio — Blalock said, “Our confidence in the Permian Basin has never wavered.”

In making an investment, Denham has a fundamental focus on asset quality, Blalock said.

“Our main tenet is low cost, ample running room and infrastructure in an area with an established hydrocarbon regime. The Permian Basin ticks off all those boxes and with additional takeaway capacity coming online; that will only help.”

Abney said opportunities created by low oil prices include the ability to acquire properties deemed non-core by other operators or that are being sold by companies that need to raise capital.

Atlantic’s management team plans to grow the company through the drill bit — with executive looking at horizontal opportunities — as well as through acquisitions and through joint ventures, he said.

Blalock said he expects Atlantic’s management team to “leverage what they’ve done well historically, which is go into an area of geological interest, and once they have their hunting ground, find the best ways to explore for oil and gas, whether it’s joint ventures or acquisitions at the corporate level.”

In a statement, Jennings said, “We’ve assembled a great team that is focused on value creation in a proven basin. While the Permian has been an area of heavy activity in recent years, it continues to present a robust opportunity set for companies with the right combination of experience and local knowledge. We believe that coupling our team’s background with the strategic and operational expertise Denham provides gives us a significant edge over our peers.”

Abney said the company “feels very good about the opportunities going forward and excited to have Denham as a partner.”